COLUMBUS, Ind. — Cummins Inc. reported today that its third quarter revenues of $4.2 billion decreased 9 percent from the same quarter in 2015.
Lower truck production in North America and weak international demand for power generation equipment were the most significant drivers of the decline in sales. Revenues in North America decreased 13 percent while international sales declined by 3 percent. Currency negatively impacted revenues by approximately 2 percent compared to last year, primarily due to a stronger U.S. dollar, the company announced in a news release.
Earnings before interest and taxes were $398 million in the third quarter, down from $577 million in the third quarter of 2015, and included a $99 million increase in an existing accrual for a loss contingency. Net income was $289 million ($1.72 per diluted share), compared to $380 million ($2.14 per diluted share) in the third quarter of 2015. The loss contingency charge reduced diluted earnings per share by 30 cents. Based on the current forecast, Cummins expects full year 2016 revenues to be down 9 percent, consistent with its prior guidance of down between 8 and 10 percent, the company stated in a news release.
“Due to the slow pace of growth in the global economy, we continue to face weak demand in a number of our most important markets,” said Cummins Chairman and CEO Tom Linebarger. “The restructuring actions that we initiated in the fourth quarter of 2015, combined with strong execution on material cost reduction initiatives, productivity gains and improvements in product quality are all helping to mitigate the impact of weaker revenues.”
Please see Wednesday’s edition of The Tribune for more details.